Exam 14: Annuities and Individual Retirement Accounts

Rita is 66 years old.She earned $25,000 this year working part-time at a store and her modified adjusted gross income was $35,000.Rita is considering making a $4,000 contribution to her traditional IRA.Which of the following statements is true regarding this contribution?

Which of the following statements is (are)true with respect to a joint-and-survivor annuity? I.Some joint-and-survivor annuities reduce the income payment after the first annuitant dies. II.No payments are made after the first annuitant dies.

Which of the following is an advantage of a longevity annuity?

Which of the following statements about variable annuities is true?

Which of the following statements is (are)true with regard to a qualified longevity annuity contract (QLAC)? I.A lump sum premium is paid to provide income at some future date. II.A QLAC can be purchased to address the risk of exhausting retirement income from an employer-sponsored qualified retirement plan.

One type of deferred annuity allows the purchaser to invest a lump sum for a specified time period.The interest rate paid on the deposit is typically higher than the rate of return paid on certificates of deposit offered by banks.This type of deferred annuity is a(n)

Which of the following statements is (are)true with respect to annuities? I.Annuities are the opposite of life insurance. II.The fundamental purpose of annuities is to replace lost income in case of premature death.

Bridget started to fund a variable annuity.Three years later,she experienced financial difficulty.She called her agent and cancelled the contract.The insurer returned all but 4 percent of the account balance.The 4 percent kept by the insurer is a(n)

Which of the following statements is (are)true with respect to a fixed indexed annuity? I.The maximum percentage gain is usually capped. II.There is no downside protection against loss of principal if the annuity is held to term.

Under a fixed indexed annuity,what name is given to the percentage increase in the stock index that is credited to the contract?

Which of the following statements regarding individual retirement accounts (IRAs)is (are)true? I.If an individual's only income during the year is from investments,he or she cannot make an IRA contribution. II.IRA contributions can be invested in stocks,bonds,and mutual funds.